Retail sales rose 0.4% in April, half the growth Wall Street had expected.
Economists had expected sales to rise 0.8% from the previous month after a surprising drop in March. This drop was revised down to -0.7% after initially coming in at a drop of 1%.
Excluding gas station and auto sales, retail sales rose 0.6% in April. Six of the 13 categories highlighted in the release saw a decrease from last month. Sporting goods and hobbies saw the largest declines of any category, down 3.3% from the previous month and 5.4% from a year ago. Furniture and home furnishing stores decreased 0.7% from the previous month and 6.4% from April last year. Growth at various retail stores and non-store retailers, which includes online sales, helped keep total sales higher than the prior month.
The report, released by the Commerce Department, provides a snapshot of consumer spending at a time when the Federal Reserve has been raising interest rates to curb inflation. The increase in retail sales in April comes as consumer prices rose at their slowest pace in two years during the month.
The report comes amid a week of highly anticipated quarterly results from retailers. Home Depot reported worse-than-expected earnings on Tuesday morning with revenue down 4.2% from the same quarter a year ago.
Home Depot CEO Ted Dekker said the company has “expected that fiscal 2023 will be a year of moderation in the home improvement market.”
Target (TGT), TJX (TJX), Walmart (WMT), and Alibaba (BABA) are expected to report later in the week.
Josh is Yahoo Finance Correspondent.
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